* Judge says Patriot attempted to manufacture venue
* Union's bid to move case to West Virginia is denied
* Mine workers' union, Patriot at odds over benefits
By Nick Brown
NEW YORK, Nov 27 Patriot Coal on
Tuesday lost a bid to keep its bankruptcy case in New York,
after the United Mine Workers of America argued that the
proceedings should be transferred to a venue closer to the
U.S. Bankruptcy Judge Shelley Chapman in Manhattan moved the
case to St. Louis, Missouri, where the company is based. As part
of the bankruptcy, Patriot is expected to seek significant cu ts
in ret iree pen sion and health benefits.
Patriot, the judge said in her ruling , incorporated two
units in New York in the weeks leading up to its bankruptcy,
essentially for the purpose of establishing venue there - a move
that, while technically legal, was "simply not fair."
Patriot filed for bankruptcy in July , five years after being
spun off by Peabody Energy < BTU.N> and Arch Coal < ACI.N>.
The union had wanted the case transferred to West Virginia,
the hub of most of the company's operations but said it was
satisfied with St. Louis.
"Nobody has ever mined one ounce of coal in Manhattan," the
union said in a statement on Tuesday. "This decision brings the
case to the heart of the Illinois coal basin, home to many of
our active and retired members and their families."
Patriot had sought to keep the case in New York, a major
site for corporate bankruptcies and the home of most of
Patriot's lawyers and bankers. The company sa id it respected
"We remain focused on using the reorganization process to
ensure the company's future viability as a competitor and
employer in a challenging market environment," it said i n a
Chapman also criticized the union in her 62-page ruling ,
which she s aid aimed to define "the meaning of justice."
The union wanted to move the case to a West Virginia court
where it f elt judges would be more sympathetic to its cause,
"It is not in the interest of justice merely to swap one
party's perceived home field advantage for another," the judge
said, citing court hearings in which union lawyers expressed a
desire for judges who "understand" and "worship" coal miners.
In court papers, Patriot has said its current labor
obligations are " unsustainable" w ithout c utt ing s ome benefits as
it re structures .
The Mine Workers union has more than 10,000 retiree members
whose pension and health obligations a re a d ministered by
Patriot, though many never worked for Patriot and retired be fore
th e Peabody spin-of f .
The union has vowed to protect its benefits through the
b ankruptcy, and has also sued Peabody Energy, saying it should
cover benefits if Patriot cannot [ID :nL 1E8LOOXT].
Chapman chose St. Louis, she said, because Patriot and many
of its officers are based there. She added that she was
influenced by hundreds of "compelling" letters from retirees,
widows and families who wish to participate in the case.
"While St. Louis may not be as convenient as Charleston for
some employees and retirees, it is by no means remote from coal
country," the judge said.
The case is In Re Patriot Coal Corp et al, U.S. Bankruptcy
Court, Southern District of New York, No. 12-12900.